Rheem vs AO Smith: Which Water Heater Wins in 2025?

Choosing a new water heater feels like picking a teammate for a marathon - you need stamina, reliability, and the right fit for your home. Two names dominate the market: Rheem an American manufacturer that offers both tank and tank‑less water heaters for residential and commercial use and AO Smith a global brand known for its high‑efficiency water heating solutions, especially in the tankless segment. This guide breaks down the key factors that matter in 2025, walks you through a side‑by‑side comparison, and tells you which brand lines up best with common New Zealand household scenarios.

Key Takeaways

• Rheem generally offers lower upfront prices and a broader dealer network in NZ.
• AOSmith leads on energy efficiency, especially with its premium tank‑less models.
• If you prioritize a long warranty and minimal maintenance, AOSmith’s premium line is hard to beat.
• Both brands meet New Zealand safety standards, but local installer experience varies.
• Consider your hot‑water demand, space constraints, and future energy‑cost outlook before deciding.

Brand snapshots

Rheem has been in the heating game for over a century, offering everything from classic 40‑gal tanks to electric heat‑pump water heaters. Their product line is segmented into "Rheem Performance" for budget‑friendly homes and "Rheem Professional" for larger properties. In New Zealand, Rheem’s distribution is handled by a handful of well‑established distributors, making parts and service relatively easy to find.

AO Smith entered the NZ market later but quickly captured attention with its ultra‑efficient tank‑less models. Their "Vertex™" series touts a high energy factor a metric that measures water‑heater efficiency, higher numbers mean less energy wasted (up to 0.99) and a sleek, compact design. AOSmith also offers a solid 12‑year limited warranty on many of its units, which can be a decisive factor for owners wary of future repair costs.

How we compare the two brands

Every homeowner cares about a slightly different mix of performance, cost, and peace of mind. Below are the six criteria we used to score each brand on a 1‑5 scale (5 being best):

1. Initial purchase price and installation cost.
2. Energy efficiency - measured by energy factor the higher the EF, the lower the energy consumption and qualification for the Energy Star a certification for appliances that meet strict efficiency standards program.
3. Warranty length and coverage details.
4. Reliability track record - based on field reports from NZ installers and consumer surveys.
5. Service network - how easy it is to find a qualified plumber or parts supplier.
6. Space and installation flexibility - especially important for small apartments or retrofit projects.

Side‑by‑side comparison

Which brand is best for you?

Choose Rheem if…

• You have a family of four or more and need a high‑capacity tank.
• Initial budget is tight and you want a straightforward installation.
• You live in a region where a local installer familiar with Rheem is readily available.

Choose AOSmith if…

• Energy bills are a major concern and you can invest in a higher‑efficiency unit.
• You have limited floor space - a tank‑less model fits neatly behind a wall.
• You value a long warranty and are comfortable paying a bit more up front for lower long‑term costs.

Installation tips for NewZealand homes

Regardless of brand, NewZealand’s climate and building codes demand a few common steps:

1. Confirm the unit meets the Energy Star New Zealand’s energy‑efficiency label requirements for rebate eligibility.
2. Check local plumbing regs: the maximum allowable rise in water temperature is 55°C for safety.
3. Plan for proper ventilation if you opt for a gas‑powered model - both Rheem and AOSmith have strict venting guidelines.
4. Allocate a dry, insulated space for tank‑less units to protect the electronics from humidity.
5. Schedule a post‑install inspection by a licensed plumber to validate pressure relief valve settings.

Cost‑of‑ownership snapshot

Using average NZ electricity rates (≈30c/kWh) and a typical hot‑water demand of 200L per day, the following rough numbers illustrate the payback period for a premium AOSmith tank‑less unit versus a mid‑range Rheem tank:

• Rheem tank: upfront NZ$2,200, annual energy cost ≈ NZ$820, 10‑year total ≈ NZ$10,200.
• AOSmith tank‑less: upfront NZ$3,300, annual energy cost ≈ NZ$560, 10‑year total ≈ NZ$9,100.

Even with higher purchase price, the tank‑less model can recoup the difference in about 6‑7 years, thanks to its superior energy factor. If you’re on a tighter budget, the Rheem tank remains a solid choice, especially when paired with a heat‑pump booster.

Common pitfalls and how to avoid them

• Undersizing the unit. A 9kW tank‑less model looks sleek but can’t keep up with simultaneous showers in a three‑bedroom home. Always calculate peak flow‑rate needs.
• Skipping the water‑softener. Hard water accelerates scale buildup, shortening the lifespan of both brands. A simple ion‑exchange softener adds less than NZ$200 to the install.
• Ignoring local incentives. Both brands qualify for the NZ Energy Efficiency Grant when installed by an accredited installer. Forgetting to claim it can cost you up to NZ$500.

Bottom line

The decision boils down to what you value most: upfront cost and dealer familiarity (Rheem) or long‑term savings and compact design (AOSmith). Both brands respect NewZealand standards, but the nuanced differences in efficiency, warranty, and service reach can swing the balance for any given household.